ONGC selects Aban, Sedco and Pride for rig contract

WE LEARN on good authority that ONGC will select rigs from Aban Lloyd, Transocean SedcoForex and Pride International for its ongoing five-rig contract.

Aban bid two rigs: Aban III (formerly Ile d'Amsterdam) and Hit Drill I, at an 'effective day rate' of $47,174. Both rigs are customs-cleared and have quoted the lowest.

They will get a contract each. Sedco bid three rigs: C.

E Thornton, F.G McClintock and J.

T Angel. C.

E. Thornton is out of the race because it has been awarded a contract for a separate two-rig tender for the same period.

F.G McClintock and J.

T Angel were offered at an 'effective day rate' of $56,542 and $50,850 respectively without customs duty. With customs duty the 'effective day rate' is $66,668 and $65,316 respectively.

Pride's two rigs: West Virginia and North Dakota were offered at an 'effective day rate' of $53,517 and $56,497 minus customs duty. Add customs duty and the day rate for Pride's rigs are: $82,449 (West Virginia) and $85,429 (North Dakota).

No doubt Pride regrets that it valued each rig at $100m to customs; other bidders valued rigs at $35m each. "Pride deliberately overvalued their rigs because of the trouble they face with Indian customs with (rig) Pride Pennsylvania (which was undervalued at $18m).

Ensco Maritime (two rigs) and New Find Oil and Gas (one rig) did not put in bids - unable to comply with ONGC's new guidelines. "We could have offered rigs (after customs duty) at between $65,000 and $70,000 but ONGC's new guidelines limit competition." Ten technical bids were submitted but ultimately just six rigs will chase five contracts.

The tender is for a two-year contract and the rigs must drill in 300 feet water depths. Price bids were opened on 2nd April.

ONGC is internally debating how to 'manage' Pride's offer. The Pride rig West Virginia ranks third in the 'effective day rate' minus customs duty. "ONGC is considering taking the Pride rigs for a separate contract for its offshore petroleum exploration licences and mining lease areas (which do not attract customs duty)." Separately, on 26th March, ONGC awarded one drilling contract to Great Eastern Shipping rig Tiranath (day rate: $40,000) and one to Transocean SedcoForex rig C.E Thornton (day rate: $45,000). The contract is for two years each and the rigs are to drill in 300 feet water depth.

ONGC is internally debating how to 'manage' Pride's offer. The Pride rig West Virginia ranks third in the 'effective day rate' minus customs duty. "ONGC is considering taking the Pride rigs for a separate contract for its offshore petroleum exploration licences and mining lease areas (which do not attract customs duty)." Separately, on 26th March, ONGC awarded one drilling contract to Great Eastern Shipping rig Tiranath (day rate: $40,000) and one to Transocean SedcoForex rig C.E Thornton (day rate: $45,000). The contract is for two years each and the rigs are to drill in 300 feet water depth.